Thursday, January 15, 2009

The Beauty Contest Keynes Didn't Write About

Everyone knows Keynes' famous beauty contest analogy, in which the marginal price/prize is what the next person bidding in the beauty contest for an item will pay.

What he seems to have left out (to my memory) is the beauty contest that went on to get Bernie Madoff to manage your money.

Since nothing ever changes, how could the great man have missed this layer of the onion?

Maybe a Keynes maven can enlighten us.

Even if not, you cannot miss the irony of people scrambling for the privilege of loosely regulated money-management, given this headline:

Madoff might not have made any trades

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